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Local government at an inflection point 

Susan Freeman-Greene’s keynote speech at the Infrastructure Commission’s Building Nations 2021 event – 17 November 2021 

Five years ago, this week, the Kaikōura earthquake struck. I was in London, in a coffee shop, about midday, when my phone lit up like an Xmas tree. Alarm bells rang on every front.  

First, is everyone safe? And then, as I was leading Engineering NZ at the time, the realisation of enormous ramifications for the engineering sector. 

This crisis created both visible devastation and subtle, more insidious damage.  

But in that crisis, New Zealand pulled together. Central and local government, and business and communities came together to remediate infrastructure, support people and communities, and protect us from future shocks.  

In Kaikōura itself, the clear vision of ‘moving mountains to reconnect communities’ drove incredible collaboration. 5000 locals and 1700 workers from multiple agencies and organisations pulled off a rebuild in record time. A testament to what can be achieved when you pull together with purpose. 

At the outset of the Covid crisis, there was no question about pulling together – the “team of 5 million” mantra galvanised us all. Central, and local government, business and communities pulled together to support and protect our people as one – as we went into lockdown and upended the way we worked. Today, 20 months on, with our focus now on vaccinations we are still holding it together pretty well, but we are seeing some fraying at the edges. 

When it counts, in a crisis, Kiwis are good at partnership. We collaborate well. We create, and trust, relationships forged under pressure. We rapidly build new ways of working. Ego and power issues are mostly left at the door – right across central and local government, iwi, business and in communities – as we all work towards common goals and the common good.  

But when we are not in an immediate crisis – and we have to look further down the track for the burning platform even if it is visible – collaborating feels so much harder. We get bogged down, lose sight of shared objectives, and creative ways to meet them. We become positional and are quick to call out others for unreasonableness, lack of understanding or bad faith. And we fixate on binary ‘either/or’ options or ultimatums.  

Today I’m going to talk about change and partnership in the context of local government. 

Local government is at a fork in the road as it faces the juggernaut of reform coming down the pipeline. How we engage with it is going to be critical to the future of local government.  

Local democracy is at stake here. It’s important. A thriving, sustainable, inclusive, local democracy, driven by intergenerational community interests, is going to be critical to meeting all our wicked problems – from three waters to climate change. These are not issues that can be solved by one sector, or one arm of government.   

Success won’t be easy – nor is it guaranteed. So many factors need to fall into place:  

  • Local government must reimagine what local democracy looks like in a future Aotearoa, which will be different from how it was before and how it is today  
  • Central government needs to reflect on what it does best and what is better done by those closest to communities. What can central government let go of? 
  • All of us must contemplate the important role that iwi/Māori have in the concept of local governance and have iwi/Māori front and centre in the conversation. 
  • And, finally, communities must actively want to participate in decisions about how they live, work and play.  

Most importantly, all these conversations need to come together, because local government affects us all. The way it shapes and creates our communities and contributes to our wellbeing cannot be underestimated. 

And, of course, Covid is not the only crisis on the table right now. 

In addition to Covid, we have climate change, our changing demographics, creaking infrastructure, and social change such as growing divisions between urban and rural, and older and younger generations.  

We also have the good and bad of the internet, which is playing into the breakdown of what we used to take for granted – the scientific, evidence-based consensus. Now, your “facts” are not my “facts”.  

While this may be a legacy of a certain US president, it is becoming much more pervasive in the political debate in New Zealand, with a growing tendency to play the person rather than the issue. This has been starkly demonstrated in the Covid context recently, and we are also seeing it writ large in the three waters space.  

And, in this time of both real and perceived crisis, this Government has launched wave after wave of proposals for fundamental change. Not only do many of these have direct and material implications on local government, they risk swamping us. They not only include the direct reforms – around housing, resource management three waters, and the future for local government – but also reforms in health and climate change, which are fundamental to our communities’ wellbeing.  

One of our mayors, after completing the involved long-term planning process earlier this year, said: 

“This time, I felt that there was another higher, far more treacherous mountain standing right ahead of us.” 

He was referring to three waters – but it’s pretty clear that this is part of significant range to cross, rather than a stand-alone summit. 

It’s a difficult and challenging place for the sector, which has many drivers towards conservatism, not least rates-averse local body voters. 

It’s also challenging terrain for LGNZ to navigate. We are the sector’s peak body, serving our members – both elected members and councils themselves.  

But our mandate is around the sector’s national interest – what is in the sector’s national interest and the good of all our communities together. Our constitution is very clear on this. But there’s an inherent conflict in that, with councillors naturally focused on the “local” in local government.  

Three waters has become a lightning rod for reacting to change, and LGNZ, with our mandate, has been at the heart of that. 

Previously we lived and breathed primarily as an oppositional group, standing against things, not for things. This definitely got us attention but gave us limited constructive influence. And we weren’t seen as credible enough for CG to invite into the front end of their policy development processes.  

But it’s a lot harder to change policy once it’s got to the select committee stage and legislation is drafted.  

So early last year, we made a strategic shift. Our governing body, National Council, decided we needed to engage much more constructively in three waters in the face of a government with an outright Parliamentary majority determined to carry out water reform. With that in mind, we joined a joint central government-local government steering group.  

This July we announced a Heads of Agreement with the Government. This secured $2.5 billion for the sector, but – much more critically –secured commitments about working through all the reforms ahead in partnership. This strategic approach is based both on the volume of change coming and a strong view that local government will have more influence if we’re at the table facing into issues, and working on solutions that hold local democracy to the forefront. Not just for three waters, but all the reforms that are coming.  

Into that mix, the Government has decided to mandate three waters reform. You will have all seen and heard the sector’s justified anger around the Government’s about-face decision to mandate.  

And to be clear, LGNZ never supported this reform being mandated. What we did was create leverage for the sector, in the event that it was. 

As to the reforms themselves, almost all the sector agrees there needs to be some change. 75% of the sector oppose the reform in its current formThose last four words are critical: In its current form.  

Where the 75% figure may be misconstrued is in giving the impression that three quarters of councils are opposed to water reform. This is not the case, and there is deep acknowledgement of the case for change. 

The eight-week feedback period amplified and crystallised the sector’s major concerns with settings of the current model: governance and representation arrangements, local voice, integration with the planning system and rural water schemes. 

These critical issues are still on the table, and we are at the table. Leveraging the Heads of Agreement, we have ensured there’re mechanisms in place to get the changes the sector needs.  

Last week saw the announcement of a robust working group to take forward work around governance, representation and accountability.  

The sector is also broadly aligned on the wider view that we will get more traction by staying in the tent.  

But three waters is just the start. Resource management reform is also heating up and is potentially more significant – and more complex – and the exposure draft report from the Environment Select Committee suggests that in its current form the reforms will pose challenges for local democracy and place making as it strives for planning efficiency.  

Thanks to our Heads of Agreement with the Crown, we’ve started to work more closely with the Government on this reform, with a joint steering committee recently established. Just last Friday, Environment Minister David Parker fronted up to one of our regular zooms of over 100 council leaders, outlining both where resource management reform is at and his commitment to working with us to find that sweet spot where we can cut through planning red tape while still enabling communities to have a real say in how their places grow and shape. 

But the biggest prize, and arguably the most challenging reform on the agenda, is the Future for Local Government. Where do we want to be in 30 years? I’m happy to put my cards on the table. I believe that our responsibility to local democracy means a range of things: giving people visibility, creating places where they can express what it is to be human, being better partners, seeing each other's dreams and aspirations, courageous conversations about what is intrinsic and that we need to keep hold of, and what it is time to let go of. Those things are at the heart of communities.  

And in my ideal future for local government we have a living, breathing, and thriving local democracy – one that reflects our modern progressive unique nation and our responsibilities to Te Tiriti. Where central government, local government and iwi/Māori are partners in the future. A local government that represents how we now look in Aotearoa and how we will look in 30, 50, 100 years. Where local government is valued, and where our communities are engaged. A future where more than 41% vote in our elections, where our talented future leaders want to stand for public office, and our communties want to  and can  add their voice to the public discourse. And a future where the headlines about local government aren’t dominated by stories about conflict and infighting around the council table but rather the value it adds. Every. Single. Day. 

But I do not underestimate the challenge.  

A big part of it will come down to the speed the sector faces into the reality of change to take up the opportunity to – with others – seriously redesign a future. Because the Future for Local Government review is an exciting opportunity – not just for local government. There are things that central government does that may be best suited for local government, and vice versa. Across housing, health, social services and others, there are a range of areas that councils would be well aligned to work in. This reform is an opportunity for a once-in-a-generation reset. 

However, at some point in the near future this review’s period of happy potential will morph into some change proposals. And the conversation will potentially become much more difficult. While the sector pushed hard for this conversation, that isn’t the same thing as welcoming the disruption.  

And a further caution – while system reform is needed, it isn’t a silver bullet. People are at the heart of the system: the consumers, deliverers, and regulators. What people and communities think and feel, and how they get their voice into the system, is important. Reform can’t just be top down; we need the community voice, as local input can influence all other pieces of work. 

We believe in strong local democracy, where people have the ability to shape their local communities. Strengthening that ability, providing the right level of resourcing, and having the right policies and the on-the-ground skills to deliver are integral for success. No one aspect will be enough. 

Local government’s strength is our connection to our communities. This strong connection to communities will remain critical as we negotiate these reforms. 

And we need to think about the whole system of government – local and central, as well as with iwi, as we create settings for the future. Not just in what we do, but how we work together differently. 

LGNZ is clear that our purpose is to be local democracy’s vision and voice. To ensure that local democracy is at the front and centre of all our discussions and all our work.  

And our vision is to have the most active and inclusive local democracy in the world. This forces us to imagine a new reality for local government – one that gets its power, momentum, richness and influence from the participation of its communities.  

My hope is that the sector and the country can stay with the conversation in a meaningful way. But I am under no illusions that staying in partnership through this will be comfortable.  

The partnership commitment in the Heads of Agreement creates a commitment throughout all the reforms, including the Future for Local Government, and invites us to walk together to that end.  

But I also know it’s easier said than done.  

There has been a history of a lack of mutual trust and it is easy to be cynical. Yes, it’s hard to make a leap of faith to engage in the spirit of trust in an environment where your experience has been something entirely different. For some, over many years.  

But I believe the only way now through some of the outrage, frustration, confusion – and cynicism – is engagement. And the only way to capitalise on the hope, curiosity and opportunity – is engagement.   

I want to end with a few lines from a young Māori leader talking about the Future for Local Government: 

“Fundamental transformational change comes when we stand side-by-side and work together – and build a bridge in a safe and dignified way and where, under intense pressure, we can say ‘we are not alone, we are together’.” 

In an immediate crisis we understand that partnership and collaboration doesn’t mean agreement. It means robust debates, in good faith and sometimes behind closed doors at pace, on the best ways to achieve our shared objectives of serving communities.  

It means facing into challenge, staying in the room, not walking away. It means accepting mistakes will be made on both sides, but that we need to keep working together to make progress. That the crisis needs us to pull together, for the greater good. 

Let’s hold this approach through the wicked problems and opportunities we are facing.